Arawak Finds Oil on North Irael Block in Russia

Arawak Energy reports that Recher-Komi no. 61, an exploration well in the North Irael block held by LLC NK Recher-Komi which is 50% owned by Arawak has found oil, proving up a new pool in the block.

The well encountered prospective oil pay in the Devonian interval at a
subsea depth of 1,625 metres, which is structurally 15 metres high to
prognosis. On drill stem test, the interval recovered 59.3 barrels of clean
oil and drilling mud during 8 minutes of inflow and recorded virgin reservoir
pressure of 182.5 atmospheres. Open hole logs indicate 5 metres of net pay.
Presently, the well is being cased and on completion, management believe it
will initially produce at least 300 barrels of oil per day ("bopd").

The North Irael block is currently producing 1,600 bopd (800 bopd net to
Arawak) from 5 of the 6 wells that had been drilled prior to the June 2006
acquisition of Recher-Komi by Arwak's 50% owned subsidiary, RF Energy
Investments Ltd. Artificial lift has been introduced in these 5 wells and a
sixth well is being worked over and will be put on pump shortly.

Current gross production from the block already outstrips the initial
forecast rate of 1,200 bopd and greatly exceeds the 400 bopd rate at the time
of the acquisition.

"We are delighted by the latest news from Recher-Komi. This has shown
that this acquisition which has already exceeded our initial forecast, has
strong further upside. We look forward to future drilling results and we will
follow this with a full 3D seismic of the North Irael block," said Alastair
McBain, President and CEO of Arawak.